Chinese EV battery manufacturer CATL recently reported an astounding revenue growth of 82.21% year-on-year to RMB 89.04 billion in Q1 2023. However, that figure also represents a 24.7% decline from Q4 2022’s record.
CATL had a record high net profit attributable to shareholders of RMB 9.82 billion, up 557.97% from the prior year but down 25.2% from the previous quarter.
As for the gross margin, CATL reported a YoY growth of 14.48% to 21.27%. However, it also indicates a decline from Q4 2022’s record of 22.57%.
Notably, CATL has four main businesses:
- power batteries
- energy storage batteries
- battery materials and recycling
- mineral resources
Last year, the company’s sales revenue mostly came from the power battery business (72%). Meanwhile, the energy storage battery unit contributed about 14%, per Pandaily.
How do lithium prices affect CATL’s revenue growth?
Major raw materials used in power batteries saw a marked drop in price during the first quarter of this year. It is especially true for lithium carbonate made for batteries.
SMM data show that on April 20, the average lithium carbonate cost for batteries dropped to 17.85 yuan/ton. Notably, it reflects a decline of 70% from the previous five months.
As a result, battery manufacturing companies may be able to cut their procurement costs due to the ongoing decline in raw material prices.
According to data provider Mysteel, the price of lithium carbonate has not increased once so far this year. Today, the average price of lithium carbonate used in batteries dropped to RMB 180,000 per ton. Meanwhile, the average price of lithium carbonate used in industrial applications was RMB 135,000 per ton. Both figures represent an almost 70% decline from their peak prices in November 2022.
In addition, lithium carbonate for batteries has an average price of RMB 245,000 per ton as of March 31. According to data tracked by CnEVPost, it indicates a decrease of 53% from RMB 517,500 per ton at the beginning of 2023.
According to a research note published on March 30 by Yang Bin’s team for Haitong International Securities, ternary lithium batteries and LFP batteries will have marginal cost decreases of RMB 60 to RMB 70/kWh when the price of lithium carbonate drops by RMB 100,000 per ton.
For an all-electric car with a 70-kWh battery capacity, in this case, the team estimates that battery costs would be RMB 4,200 to RMB 4,900 lower.
See Also:
- EV battery market grew 71.8% in 2022, CATL remained unbeatable
- CATL presents its new “Condensed Battery” at the 2023 Shanghai Auto Show
- Tesla may soon develop a new battery production plant in the US with its major supplier CATL
- CATL starts mass production of upgraded Qilin battery in China
- CATL explores EV battery technology without lithium, other companies outpaced it
All that said, CATL ultimately surpassed Bloomberg Intelligence analysts’ expectations. Auto News reports analyst Joanna Chen’s forecast that the company’s finances would likely be boosted by increasing battery sales and declining lithium prices.
